Senator Jennifer Beck (R-Monmouth) said that the New Jersey Senate must act to prevent the expiration of the state’s two-percent cap on interest arbitration awards to help municipalities control costs and prevent the recurrence of large annual property tax increases that were the norm before the cap was instituted.

Sen. Jennifer Beck called on the New Jersey Senate to protect property taxpayers by preventing the expiration of the state’s two-percent cap on interest arbitration awards. (SenateNJ.com)

“We made significant progress in slowing the growth of property taxes in recent years through the passage of the two-percent property tax cap, health and benefits reforms, and a temporary cap on interest arbitration awards,” said Beck. “Unfortunately, the interest arbitration cap, a key component of those property tax stabilization efforts, is set to expire at the end of the year. If the Legislature fails to prevent the expiration of the interest arbitration cap, it’s likely that property taxes will begin to rise again at rates unseen since the McGreevey and Corzine eras.”

The interest arbitration cap limits to two percent the base salary increases that can be awarded to police and fire employees when contract negotiations enter the process of binding arbitration.

The temporary arbitration cap instituted in 2011 was extended in 2014 until the end of 2017 as a result of its proven ability to lower municipal costs.

Beck sponsors legislation, S-1639, that would make the interest arbitration cap permanent by repealing the sunset provision from law.

The New Jersey State League of Municipalities, the New Jersey Association of Counties, and the New Jersey Conference of Mayors held a press conference today calling for the Legislature to make the cap permanent.

“Local officials are sounding the alarm that there will be a property tax explosion or severe service cuts if the Legislature allows the interest arbitration cap to expire,” said Beck. “I urge the Senate President to allow my legislation repealing the sunset provision to be considered at our upcoming Senate session on October 5th. With so little time before the cap expires, we shouldn’t allow this opportunity to protect property taxpayers to go to waste.”